Our Side Gig Successes In 2015 – Churning, Arbitrage, and More

As 2015 winds to a close, it’s a good time to look back over the year and see how we did financially compared to our goals. Back in 2014, we discovered the idea of financial independence and decided to set ourselves up with a lifestyle that balances maximizing life in the present and setting ourselves up for an awesome future. Back in April of this year, I walked through our rough plan to become FI by 40 and laid out a simple 3 part plan for making it happen. So far we’re actually ahead of schedule, but potential lifestyle changes in the next couple decades make me hesitant to move our goal yet. Regardless of when we determine we’re financially independent, the 3 steps to get there remain the same: Reduce Expenses, Increase Income, and Invest Efficiently. This post will focus on the Increasing Income part of the equation and will walk through a few different side gigs we participated in to increase our income this year including gift card reselling, credit cards, bank bonuses, and more.

Gift Card Arbitrage

Earlier this year, I started buying and selling gift cards for profit and points, aka Gift Card Arbitrage. The original plan was to use it as an outlet to generate spend on credit cards, but eventually transitioned my mindset to focus more on the cash profit (although I pay attention to points too). My first ever gift card purchase for resale took place in February of this year and I ramped up the volume not long after. I got in a bit of reselling funk after completing the $20k Reselling Challenge, but ramped up again closer to the end of the year.

Overall, it’s been a great side gig that I can completely control when and how I invest time in it. The income is moderate per hour spent and anything but passive, but it makes a nice complement to credit card churning (which I’ll cover next). Here’s some of the numbers behind the business if you’re curious (these numbers are only for completed sales and don’t reflect current inventory):

Gift Cards Purchased: 979

“Problem” Gift Cards: 31

Total Sales: $68,290.87

Money Lost on Problem Cards: $757.90

Cash Profit: $3,211.53

In addition to the cash profit, I’ll let you use your imagination on all the miles and points I earned with ~$68k of credit card spend.

We’ll see how much “profit” is actually left after all of my business deductions, but either way I’ll have the honor of adding a Schedule C to my taxes for the first time. Paying taxes is never fun, but it’s pretty awesome to make a profit with my own business in that true entrepreneurial sense. Either way, I think I’ll continue reselling gift cards when the right deals come around, but will try to focus on the more scalable and profitable opportunities instead of chasing every card I can make a buck on.

Credit Card Churning

2015 marks the first full year that Becky and I participated in the hobby of churning credit cards for points and profit. We discovered the process last year, applied for our first cards in August of 2014, and continued to chase lucrative bonuses throughout 2015. The primary goal of churning cards for us is to subsidize our travel (which it does an AMAZING job of), but you can’t ignore the cash bonuses we took advantage of to come out cash positive on the year even after taking into account the annual fees we paid!

Our trips thanks to Churning this year included 13 round-trip domestic flights and 11 nights in hotels for about $400 out of pocket! The highlight was probably 8 Nights in NYC, but we’re really ramping up the luxury next year with trips to Cancun (all-inclusive!), New Zealand, and Fiji already booked!

Here’s some select stats from our Churning adventures in 2015 (both of us combined):

We certainly weren’t as aggressive as we could have been signing up for new cards, but still walked away with a ton of points and a nice chunk of cash to go with it. The denied applications were for the Ink Plus and an Arrival+, but we didn’t even bother calling recon for the Arrival+. Most cards were acquired for the signup bonuses, but others (such as the Amex Platinum) were obtained to take advantage of the various benefits the cards offer.

One of my goals when applying for new cards is to stick to ones that we can meet the spending requirements via our regular spending (we do little to no manufactured spending). In this case, the ~$43k almost exactly matches our spending for the year that can be put on credit cards (pretty much everything but the mortgage) and that definitely wasn’t an accident. While I also spent ~$68k reselling gift cards as noted above, I tend to look at that as just bonus points. By the way, that ~700k number above is only signup bonuses and doesn’t include the regular points earned from spend on the cards.

Could we be more aggressive and sign up for more cards? Absolutely. Will we? Maybe. Right now we’re earning and burning points at a fairly consistent pace and the main limitation on our travels is vacation time, not miles/points. I don’t have much interest in accumulating a pile of points that would take years to get through, but there are always cash signup bonuses available as well. We’ll have to see how our strategy plays out in 2016.

Bank Account Bonuses

Credit cards aren’t the only financial instrument offering lucrative signup bonuses and we managed to take advantage of several bank bonuses throughout 2015 as well. These bonuses were primarily cash (that will require taxes to be paid), but we added in a few miles and points as well.

Here’s some select stats from our Bank Bonus chasing in 2015:

New Accounts Opened: 9

Signup Bonus Totals: $1,150 and 75k miles/points

Ongoing Bonus Total: $160 (Santander extra20, which is unfortunately no longer open to new customers)

Bank account bonuses are much more limited than credit cards due to a small selection and fairly strict churning rules (many are once per lifetime), but there’s no reason not to take advantage when you can. The Santander extra20 account is one of my favorites because it’s an ongoing $20/month that can be automated, but they no longer allow new customers to sign up for it. It still works for existing customers though, so hopefully I can continue to get $240/year into perpetuity.

The Blog – Money Metagame

A post about our side gigs wouldn’t be complete without mentioning the blog you’re reading right now! Don’t get too excited though because it’s by far the least profitable side gig that also happens to require the largest time investment. Having said that, it’s also probably the side gig I’m most proud of. Using the blog as a way to interact and contribute to both the miles and points and personal finance worlds has been an amazing experience and one that I plan to continue into the future.

The blog officially launched in late November of 2014, but nobody really noticed it until April of this year. I owe a HUGE thanks to themanyothergreatblogs that have linked to my content since I launched the site!

I didn’t start the blog to make money and that hasn’t changed, but those ads off to the right do pull in a few bucks every now and then which is nice. Someone even signed up for Ebates through a referral link I had in an old post! (That’s right ladies and gentlemen, I’ve received a whole $5 from referral bonuses via the blog!)

Big thanks to all of my readers and hopefully I can continue to generate content worth reading. I’m always open to suggestions if there is anything you want me to talk more or less about. By the way, would you want to support the site in some kind of monetary fashion? Should I set up a page with all of my referral links? I’m certainly not opposed to the idea of making this blog more profitable, but definitely don’t want to turn into “that guy” who just pushes affiliate links in every post. I’d love to hear some feedback on this from my readers, feel free to email me or leave a comment below.

I’ll leave you with a nice graph to help show how much this blog has grown over the past year:

2015 Side Gig Summary

Overall, 2015 was a great success when it came to all of the side gigs we pursued outside of our full-time jobs. I spun up a gift card reselling business that managed to pull in a profit despite a few setbacks along the way. Becky and I both pursued signup bonuses from credit cards and bank accounts to earn tons of “free” travel as well as a little extra cash along the way. To top it all off, this blog managed to obtain some regular readers and make a few bucks which very much surpassed my expectations.

By my rough calculation, we managed to bring in around $5,000 through the 4 gigs mentioned above! Not to mention the potentially tens of thousands of dollars worth of travel that the miles and points allow us to book. We’ve already established a healthy level of spending to match our desired lifestyle, so all of this extra money will go straight to investments and grow our wealth. Using the Hours of Freedom calculation I created in The Value Of An Extra $100, we should be able move our FI date up by about 237 working hours (or about 6 weeks!) thanks to our side gig income this year. Looking at it another way, investing that $5,000 now when we’re 25 years old will allow it to grow to ~$74,000 in today’s dollars by the time we reach the traditional retirement age of 65 thanks to the power of compound interest!

There’s a wonderful feeling that comes with earning money from side gigs that just isn’t there when you get a regular paycheck, even if the amount doesn’t compare. Maybe that’s why we’re so interested in generating enough passive income to not even need a job in the future…

I hope all of the side gigs you pursued in 2015 were successful as well. Either way, you’re welcome to join me in 2016 on my quest to continue earning money outside of the regular 9-5 and accelerate our path to early financial independence! Happy Holidays!

I’ve sold exactly 1 piece of merchandise (technically 2 I suppose, but same item) thanks to a recommendation from your blog and made a decent profit on it. It’s definitely something I’ve considered diving into more, but haven’t made the leap yet. The time investment is scary, but I’m sure I’d manage.

Thanks for the great material on the subject on your blog, you’ll be a great resource if I ever do step up my merchandise reselling!

great blog. I just started this past summer and its been fun and profitable. your advice is wonderful. But i do wonder what type of hit your fico score took when getting all those credit cards? thats what makes me nervous of applying for so many credit cards. Can you address that issue also.

The TL:DR is essentially that your credit score won’t be negatively impacted if you pay everything on time and pay attention to your utilization. Honestly, I’ve even stopped paying close attention to it because my score has slowly risen over time despite signing up for a new card every month or so. Aside from glancing at it on my monthly statements when available, it rarely even crosses my mind anymore.

The credit score you posted was from Transunion. I’m sure your Experian has probably gone down a little more. Your point holds that it’s not significant, but hardly anyone pulls Transunion so it doesn’t take a hit from inquiries.

That is true, Transunion does tend to stay a little higher than the others because of less inquiries, but the bulk of any credit score is accounts and payment history versus the small impact of hard pulls. I chose to use it because of the nice graph and longer history it has versus others.

For comparison, my Experian score (from Amex) currently sits at 749 but was 777 last month.

Great article. Congrats on all your success in 2015. I hope 2016 is even more profitable. I think i might join you in the Gift Card Arbitrage Arena as like the idea of having a side hustle in addition to my 9-5.

Yeah, revenue is very low for the time I put in, but I do enjoy it as a hobby right now.

I haven’t done too much research on CC affiliate links, but I understand they can pay $100+ per approval on the higher end cards, probably much less than that on the smaller ones. The trick is that you must meet minimum quotas and have your blog somewhat moderated to not upset the banks which doesn’t sound fun at all.

That is a very nice summary, Noah. Nice work! I started following you earlier in the year and was inspired to start my own blog and business as well. I never thought gift card reselling could generate much profit, but I was surprised to see how many money making opportunities came out this year. With a bit of creativity, stacking promos/discounts/gift cards and timing, I averaged 5-6% return per card. That’s certainly much better than the financial market considering it takes less than a month if not just days to sell a gift card. Thanks for all the tips you’ve shared! I need to write my year end summary as well.

Do you have any plans to scale up and increase your gift card churning? I feel like there are so many opportunities and not enough time to go after each of them. Also, I’m curious to know how you did with the AMEX Offers. How many AMEX cards do you and Becky have? I was reviewing some numbers earlier in the week and found the AMEX Offers to be a nice bonus to add to the miles and points collection.

I got into reselling gift cards about two months ago and can’t seems to get the same margins you do. 5-6% is really nice! How much volume do you run? I try to jump on any gift cards that run any profit, for the sake of MS. Do you mind sharing where you source? I could share some of mine. Thanks!

Logan, you can check out my website/blog (www.fptgiftbox.com). I share some tips but I’ve not had much time to post articles lately. You can increase your profit margin on Raise if you’re a bulk seller as the commission is much lower. Also, you can earn $1.50 per card you list if you link via Topcashback. If you’re selling $25 gift cards, that’s already 6%!! $100 gift cards would be an extra 1.5%. Credit cards are usually 2-3% point value.

For some cards, I just want to break even to meet minimum spend. I can sometimes make 10-15% (Amazon), even 40% (Airbnb).

I didn’t realize that the 1.50 per card was also applicable for bulk sellers. How do you fill the the bulk seller form out to get $1.50 per card? Do you list them individually or do you list all that you have available?

I guess my real question is, where are you able to find big brand gift cards like amazon where you earn a 10-15% profit on them. That’s amazing!

Anyways, I’ll be going through your blog and hopefully learning a thing or two. I have a few ideas of myself that I’ve been testing out.

Some deals are seasonal. For example there is 10 UR per dollar on amazon from Chase Freedom this quarter. I’d look at as like 12% back give or take. 5% from discover is also doubled to 10% if you got on that deal.

I took advantage of the Amazon AMEX Offer that was $15 off $60 (25% discount). I synced the offer on 35-40 AMEX cards and bought all gift cards. I also maxed out the 5x UR on $1500 with Chase Freedom (4 cards), then 10x when they doubled it in November (again 4 cards), and the 5% (doubled to 10%) on the Discover (4 cards). So in total, I bought over $20k worth of Amazon gift cards at 10-25% discount, then sold them at about 7.5% discount to family/friends/colleagues/neighbors.

To receive the $1.50 from TCB, you have to list each card individually using the link on TCB’s Raise page, not the bulk seller page. The commission is still your bulk seller rate, but you get $1.50 extra from TCB. This is particularly useful for selling small denomination gift cards for an extra 3-6% in profit margin. If I list 15-20 gift cards every day, that’s $20-30 extra per day. Over a month, that’s $500 which is a nice chunk of change.

When Safeway was selling the Gap gift cards at 20% discount, I bought the gift cards in all various denominations. $500s to rake up LOTS of miles and $25s to earn a few extra bucks from TCB.

Hey Susan, thanks for reading (as always!). I’m glad I inspired you to start a blog and I love the approach you are taking to make it a charitable endeavor, I’m sure you will reach your goals sooner than you think. 🙂

I haven’t decided how much I will scale up my gift card business this next year. Will definitely focus on scalable opportunities, but probably won’t chase some of the smaller ones. I’ll guess we’ll just have to wait and see what I feel like as the deals come out. Becky and I currently sit at 12 Amex cards, but I haven’t even synced the most recent couple to Twitter. Need to do that soon!

It took me a few weeks to sync all my AMEX cards to Twitter (I’m up to 40 cards now but not all in my name) and it was a pain! Twitter limits 2-3 account creation per day before they require phone verification. In recent weeks, the good offers don’t have a Twitter hashtag, so I’ve had to manually log in 6 different accounts to sync up all the cards. With that many cards, I got a better sense which cards have the best (and worst) offers. I get many offers on the Platinum, Gold, and SPG. Costco has the worst offers. And it looks like I’m averaging $300-400 per account this year on AMEX Offers statement credits. That more than pays for the annual fees, so I’m considering keeping many of my AMEX cards beyond the first year. 🙂

I’ve also been working on creating a better system (spreadsheet) for tracking which cards have which offer and what I’ve used so far. I find that the accounting/recordkeeping part take a lot more work than the actual MS… which leaves almost no time left to write blog posts! One day… I’ll quit my silicone valley job to do this full-time.

Noah, I’m fairly new to the gift card arbitrage “game,” yet from what I’ve experiences thus far, and compared with past stock trading schemes I’ve seen in decades past, I have a sense that this game is quite…. well, the playing field is not level.

Above Susan quite remarkably notes all the discounted cc promos she took advantage of this past quarter (Amex, Ink, using on Amazon discounts, grocery stores, etc., then getting raise.com “bulk seller” rates for liquidating). Bravo for her and her “seed faith” (e.g., the “blessings” & such) strategy. But I have serious doubts about this game going forward.

Happens I was closely monitoring the connection between the various Amazon gc discounts and the liquidation prices of the same brand cc’s via raise, giftcardgranny, etc….. I saw a DIRECT correlation between the promos and the selling prices. That is, time after time, even with the extra 25% Amex boost, you’ll be lucky to break-even with the Amazon marketed gift cards….

Take for example the current sustained flooding of the market with GAP/OldNavy gift cards…. You’ll be lucky to liquidate them for 30% off face vale. (by the time you add in commissions)

Ah, but that’s still susan’s favorite example. (as you could get GAP cards everrrrywhere at 20% discount)

Oh sure, I’ll continue to dabble — when I know for sure I can break even. But my sense is going forward, as more and more of the points & miles crowd tries out gift card churning as a strategy for ms, the game will become increasingly …

risky.

(and all the seed-faith in the world won’t prove otherwise)

Be wise as serpents on this one. Just because it “works” when the market had fewer players doesn’t mean it will still work as the big players with unlimited time to burn continue to ramp up their game.

(and that’s before we talk about all the severe problems over at Raise.com)

You point out something very obvious about the reselling game which is that it’s not indefinitely scalable and the more players involved will reduce profits. As reselling is pure arbitrage, this all makes sense. When you consider that many people are fine breaking even or even taking a loss in the pursuit of credit card spend, it becomes even more challenging to turn a profit.

On the other hand, while the barrier to entry is pretty low, the art of reselling certainly isn’t low effort (beyond the easiest of flips) and you do take on a certain amount of risk in the process. A lot of people in the miles/points game jumped on gift card reselling in Spring(ish) of 2015, but the majority promptly left soon after once they realized the risk/reward and time requirement of actually doing it with any scale. There will always be those who dabble, but I also believe there will always be opportunity to profit by going the extra mile.

For most of the reasons you brought up, there’s no way I’d ever leave my 9-5 to pursue gift card arbitrage as my primary income, but it is a nice way to make a little money on the side whenever I feel like it.

Thanks for the thought-provoking response!

Side note: I haven’t had any problems with Raise as a user (buying or selling). Are you referring to the business aspect of it with their venture money?

Oren at Oren’s Money Saver talker about how he stopped sharing deals because when he does, the market is flooded with the same items and his profit margin suffers. But he also notes that sometimes with a little patience, the prices do rebound after inventory goes down. To sell well, you either want to be the first or the last. So in a way, there’s some strategy to the game and not just all MS. Most people take the easy path and do what everyone else is doing, like jumping off the cliff and buy gift cards in an already flooded market (e.g. GAP, Amazon, Target, iTunes).

I study the stock market and I’m an Elliotician. Research “Elliot Wave” and you’ll find that stock prices correspond to people’s sentiments. It’s remarkable. You want to be countertrend. If everyone is screaming buy something, you probably want to start selling and vice versa.

Some sometimes I’ll buy gift cards in a flooded market to get the best deals (stacked with other promos). You also have to find a different channel for liquidating other than where everyone else is selling.

Best of luck. Gift card reselling isn’t for everyone. For me, I love the strategy part of buying at the best price and selling to people who thought they got a great deal. I don’t do it just for the profits although that’s a necessity to continue. It’s a sense of satisfaction of doing something extreme and crazy like buying $20k gift cards at Safeway in a day or going to Whole Foods with 20 credit cards and doing split transaction for all 20. 😁

By the way — I sell many gift cards offline as well and not just on the gift card exchange sites. The current flooded inventory with Gap gift cards aren’t my cards. I have a few but I bought and sold most of my Gap gift cards back in October before everyone started selling them. Then I bought a second batch early November and didn’t sell them until the week of Thanksgiving when 1) the Safeway deal was over and 2) people went crazy with the Black Friday sales. I think in a single day, I sold $20-30k gift cards at about 7-8% discount — down from 12-13% just a week prior. Of course, Black Friday sales come once a year — so my guess is the next shopping frenzy is around Valentines Day or whenever Raise.com includes Gap/Old Navy/BR in the weekly ‘TAKE5’ deals.

Just some examples of utilizing strategy, timing, and patience with gift card reselling.